How Aligned are Sales and Technology Teams in modern business? Well the simple answer is… they are not.
As a global Executive Recruitment firm we help place leaders within some of the fastest growing and disruptive technology businesses in the country. Through this work, we have frequently noticed the damaging void that seems to exist between the commercial and technology departments within numerous organisations.The damage that can be caused by this void can be significant and will have several negative business impacts, including but not limited to:
- Exceeded Deadlines
- Poor Customer Experience
- Reputational Damage
- Margin Erosion
- Culture built on Silo’s and a blame culture
- Lack of Scalability
- Customer Retention
To get under the surface of these key relationships and help boards to organise more effectively, we surveyed over 100+ industry leaders who were mainly a mixture of CTO’s and Commercial Directors to understand their thoughts.
One absolute stand out survey finding was that only 20% of Commercial and Technology teams align on key business objectives – hardly a recipe for success!
So, let’s look further into the questions that were asked and review some of the findings. Firstly, we considered the structure of these teams and asked:
Does the sales team report into the technology function?
Interestingly, only 7% of commercial and sales respondents stated they currently report into a CTO/CIO within a technology department. This wasn’t hugely surprising but we wondered whether some of the challenges that we have highlighted above could be improved if the org chart was changed?
Overwhelmingly, the view of our respondents was that the two departments should be kept separate. With 93% of sales professionals and 64% of Technology professionals confirming that they do not believe that the technology and sales teams should form one department.
One respondent even went as far as to say: “are you mad?”
Where is the confidence?
The two functions did happen to agree on one thing, equally expressing that they lacked the confidence and ability to deliver on time and on budget because of the dysfunction.
Remarkably, 70% of both functions stated that they lack the understanding and capability to deliver or challenge client requirements appropriately. Meaning that astonishingly only 1/3 of respondents have confidence on their capability to deliver their technology into customers at all.
This issue also raises concerns around the communication between the two functions. Without the required knowledge it is unlikely that both teams will have the confidence to communicate with one another on key business goals. And inevitably, a lack in communication will lead to misalignment.
"The lines between Sales and technical teams have become increasingly blurred over the last decade. That is to say that Sales people must have a clear understanding of the technology being sold in order to articulate the benefits and Technical people must have an appreciation of sales targets and objectives in order to provide the type and level of support necessary."
What are the key alignment priorities for Sales and Technology teams to address right now?
We asked respondents how well they think sales and technology are aligned on:
- Long term vision
- Client engagement
The data showed on average no better than 2/10 on alignment for any of these areas and interestingly both functions agreed they align the least on communications and culture. Nonetheless, both of these areas are key in establishing any business relationship and misalignment is likely to cause severe fragmentation.
To boil it all down to one overriding problem, it is clear to see there is a chronic lack of trust between Sales and technology teams. Clearly, more work needs to be done on harmonisation of incentives, increasing cross company empathy and collaboration.
"It has always been a difficult area to create harmony and togetherness due to differing short term aspirations rather than long term strategy."
What are the overall business priorities for technology organisations?
Surprisingly, although there is such disparity in overall alignment, both commercial and technology respondents rated increasing sales, improving customer experience and increased innovation as key priorities for their business in 2017. Revealing that although the two functions do not align on any fundamental areas, they do share the same business priorities.
As one respondent stated the two function have “differing short term aspirations rather than differing short term strategies.” Arguably, without alignment the two functions cannot successfully go to market. After all, “sales on its own is doomed to failure and technology without sales will not reach customers.”
What are we seeing from our clients?
“As leader of the Technology Search practice at EO Executives, I’m privileged to have forged relationships with some of the leading CTO’s, CIO’s and Product Leaders up and down the country.
I frequently hear mutterings of discontent and the ongoing challenges of shipping high quality software products that meet customer expectations…let alone a product that exceeds this!
Some of the wider issues stem from the ongoing war for talent and the increasing demand for technology skills, but many in my opinion are self-inflicted due to conflicting priorities.
Of course, Start-Ups are keen to prove concepts and bring in new business and thus Sales leaders within more established businesses are heavily targeted on revenue and sales. Therefore, (I guess) it is only natural to become the ‘yes’ men and bow down to customer demand, even if these demands are unrealistic. However, this causes customer expectation to be incorrectly set and from here it’s a downward spiral.
Of course, the sales guys would probably tell a different story.
I certainly wouldn’t say a blame culture or finger pointing is typical within my clients. In my experience, Technology leaders, really do seem to want to work closer to sales and become more commercial themselves.”
Ryan Hill – Commercial and Marketing Practice Lead
"As Head of our Commercial and Marketing practice and co-leader of Technology alongside Ben Walton, I have had the luxury of working with some of the UK’s fastest and disruptive technology companies. Most of which require CCO’s, CMO’s, SVP of Sales or Group Commercial Director’s to drive forward their next stage of growth, especially when VC’s have placed significant investment.
Being an ex-Commercial Director myself, I can relate to the conversations and meetings I have on a regular basis whereby my clients lead with “there is too much thinking, and not enough action”. Music to my ears as I know where the issue lies; the clear majority require a certain type of individual with a certain skill set that can take a value proposition to market effectively.
From what I have seen the disconnect between Sales and Technology is a result of several factors. However, the main issue seems to be due to a lack of alignment in personalities. In start-ups, it is important to stick to your strengths. The technology teams need the flexibility to be creative and produce high quality products, and sales teams need to focus on execution of sales and winning work.
Problems occur when technology think they can sell and sales think they can create product. Stick to what you know!"
The technology industry has an internal culture clash between commercial operations and technical delivery.
The findings indicated that the two functions should be a partnership and work more closely together by communicating both informally and formally on a regular basis. Unavoidably, sales need to have a clear understanding of the technology they are selling to articulate the product benefits.
Similarly, technology teams need to align on sales objectives, so that they have the ability provide the right level of support and work to innovate products and sales process. Most importantly, it must be communicated that alignment is fundamental for both parties to provide a great customer experience and increase sales.
Boards need to address this as a priority and start building trust before it’s too late.
We will soon be running a free to attend webinar with senior leaders from both Commercial and Technology to help establish how to communicate and align. We hope you'll join us on that and in the meantime, we'd welcome your thoughts so please comments below... were the results a surprise to you?